It's actually very simple...

Why should we, or anyone else for that matter hire someone without a degree over someone with similar credentials who has a degree?

Bear in mind that there are thousands and thousands of applicants for still a relatively few positions. So the question is how do you differentiate between thousands of applicants with similar credentials?

Also, right or wrong, but the military pilots are still an unofficial preference at major airlines. Considering that they're officers, and a degree is a requirement to be an officer, it stands to reason that a competitive applicant will also have a degree.

Foreign major carriers often get their pilots from their ab initio programs and not from the retiring or separating military pilots or experienced regional pilots which is the case here. In fact, a few legacy European carriers won't even hire experienced pilots and will almost exclusively hire ab initio grads when they're hiring new pilots.

A degree/volunteerism requirement is an example of a simple supply/demand curve here and means to differentiate between applicants given the sheer volume of applications.